Warner Bros. Discovery expected to slash jobs, restructure HBO Max as earnings loom

Warner Bros. Discovery (WBD) has plenty of questions to answer ahead of its earnings report on Thursday.

The three-month-old streaming conglomerate, which is expected to report its first quarterly profits since the $43 billion merger, plans to lay off 70% of its development business, according to The Wrap, which cited “several insiders.”

The news has fueled speculation about the future of HBO Max with sources telling The Wrap that CEO David Zaslav, known for his cost-cutting leadership style, will announce a major restructuring of HBO Max and Discovery+ either during earnings results, or shortly thereafter.

The outlet explained that the move will “result in a gutting of HBO Max, significant layoffs for its executives and staff to minimize layoffs with HBO, and a combined streaming service with Discovery+.”

There will also be a harder line between scripted and unscripted content, depending on the source.

The stock was up 4.5% at market close on Wednesday, but was relatively flat after hours.

Earlier Wednesday, the studio confirmed that two films slated for release on HBO Max — “The Batgirl,” starring “In The Heights” star Leslie Grace, as well as “Scoob!: Holiday Haunt” — have been pulled.

Warner Bros. did not immediately respond to Yahoo Finance’s request for comment on the layoff reports or its decision to pull these two films, but provided a statement to CNN, which it owns.

“The decision not to release ‘Batgirl’ reflects the strategic shift in our leadership as it relates to the DC Universe and HBO Max,” a Warner Bros. spokesperson said. to the network.

“Leslie Grace is an incredibly talented actress and this decision does not reflect her performance,” the statement continued. “We are extremely grateful to the filmmakers of ‘Batgirl’ and ‘Scoob! Holiday Haunt’ and their respective cast and look forward to collaborating with everyone again in the near future.”

The DC Comics movie was nearing completion and cost the studio $70 million to produce.

The news comes as the company seeks to improve profitability and reallocate costs.

Warner Bros. Discovery has previously said it plans to cut costs by $3 billion over the next two years and distribute those savings across streaming content.

At the time, questions were swirling about where these funds came from – this could be the start of this venture.

Alexandra is a senior entertainment and food reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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